The construction of the cryptocurrency community has sparked a cultural war between the early purists (crypto computer faction) and the later visitors (crypto casino faction). This article, sourced from Richard Chen’s article “Computer vs. Casino: Crypto is Culture War,” compiled, translated, and written by Blockbeats, explores the current cultural war in the cryptocurrency industry and analyzes the two camps within the industry – the “crypto computer faction” and the “crypto casino faction,” and how this divide came about. The article not only analyzes the current situation but also presents concrete solutions, suggesting that the industry should shift from zero-sum games to creating more positive experiences.
Drawing on Steve Wynn’s success in the Las Vegas casino industry, the author highlights lessons that the cryptocurrency industry can learn, such as focusing on experiences beyond gambling, providing a new perspective and thinking for the future development of the cryptocurrency field. The translated version of the original article by BlockBeats is as follows:
There is no doubt that the culture of the cryptocurrency industry has undergone significant changes in the past year for anyone in the crypto industry.
A cultural war has emerged among the builders of the crypto community, a conflict between early purists (crypto computer faction) and later visitors (crypto casino faction). I will explain the positions of these two political factions and how we have arrived at the conflict we have today, and then outline a delicate path forward for the cryptocurrency industry to resolve its cultural war.
The people in this camp believe in the ideals of Satoshi Nakamoto, the founder of the industry, to decentralize power from corrupt institutions to the people.
They tend to be early entrants into the crypto industry. A group of people in 2013 were primarily currency libertarians who were attracted to Bitcoin as a hedge against reckless monetary policies. For these staunch Ron Paul gold bugs, Bitcoin would be a sponge for absorbing the excess liquidity from the Federal Reserve’s currency printing.
“Ron Paul gold bugs” refers to those who staunchly support the views of former U.S. Congressman Ron Paul. Ron Paul is known for his support of the gold standard and his criticism of the U.S. Federal Reserve system. His followers are referred to as “Ron Paul gold bugs.” These individuals typically believe that a gold standard or a similar financial system can provide a more stable and reliable store of value, particularly in combating currency devaluation and central bank monetary policies.
In this context, Bitcoin is seen as a “liquidity sponge,” absorbing the additional liquidity in the economy resulting from excessive money printing by the Federal Reserve. In other words, for these “Ron Paul gold bugs,” Bitcoin is seen as a tool to resist traditional financial systems and central bank policies, especially as these policies may lead to currency devaluation and economic instability.
A group of people in 2017 (my generation) were primarily technologists who may not be as ideological but were attracted to crypto as a new computational normalization. Ethereum demonstrated the potential for decentralized applications (dApps), where you not only read and write data but own them. This led to the concept of web3 and the decentralization of large tech companies and gatekeepers of the internet.
Today, these two groups represent the silent majority who still believe in Satoshi Nakamoto’s vision and are optimistic about new use cases and products driving the field forward. However, at the same time, they are afraid to speak negatively about the current popular Ponzi schemes driven by influencers, lest they become targets of online mobs. Therefore, they remain silent.
People in this camp cynically view crypto as a decentralized casino and wish to maintain that status. The purpose of their construction is to add more rooms to the casino. That is, to find creative ways to hyperfinancialize everything and engage in speculation, whether it’s speculating on a friend’s net worth using a mobile phone or speculating on shitcoins using Telegram bots.
Most of them entered the crypto industry in the latter part of 2021, coming from trading and financial backgrounds. They are a very outspoken minority, adept at cultivating interactions on Twitter. As a result, they dominate online discourse and create tension between the early purists and later “visitors,” just as nativists harbor resentment towards immigrants who do not assimilate and change the culture.
Most of them are also quite young. My hypothesis is that this is a “second-order effect” of a decade of zero-interest rate policy (ZIRP) and the failure of the traditional financial system to serve millennials and Gen Z. Young people increasingly feel the need to get rich quickly to repay student loans and afford mortgage payments. When people feel trapped in intense competition, they turn to casinos in an attempt to escape their predicament.
Casinos are useful in guiding adoption because degens are early adopters. They have a risk tolerance to be beta testers of unproven financial products. Degens are easily overlooked by outsiders, but they are the lifeblood of crypto. They are the blue-collar workers in the trenches, trying out every new product firsthand.
During the bear market of cryptocurrencies, there were no new users entering the space. Applications struggled to onboard new users and were forced to focus on existing strong user bases, which was fine in the short term as trading volume was primarily driven by strong users. For example, the top 2.2% of users on OpenSea accounted for over half of its trading volume.
However, problems arise when projects become cynical, believing that mainstream adoption is impossible. Motivation then becomes to accelerate the degradation of blockchain technology and design zero-sum applications akin to casino table games. As a result, we have seen the emergence of Ponzi economics, multi-level marketing schemes, and unsavory financial aspects.
Ponzi schemes have short-term product-market fit because there will always be thousands of crypto natives, degens, who will gamble on every new shiny speculative application. This creates a zero-sum money game culture of financial engineering, where influencers emerge to attract unsuspecting retail users to purchase, only to sell later. That’s why so many people work hard to cultivate interactions on Twitter and become influencers because that’s how the odds in the casino will be in their favor. Influence is a profitable business model in a casino.
Outside the casino, catering only to degens is off-putting to anyone not in the degens’ bubble. I don’t blame the general consumer for disliking cryptocurrencies and NFTs. Every time they hear about them in the news, it’s associated with greed, Ponzi schemes, and unsavory characters on the internet. Designing zero-sum applications discourages more people from entering the crypto space and using on-chain products.
We need to consider methods to grow the user base of cryptocurrencies, such as Bitcoin ETFs. Bitcoin ETFs are a breath of fresh air in this space, as they allow trillions of dollars in retirement savings that previously couldn’t access cryptocurrencies to finally have exposure to Bitcoin.
That being said, how can we truly achieve mainstream adoption?
I met Steve Wynn in October, and he told me about his experience developing hotel and casino businesses. One unique insight he had at the time was to focus on experiences beyond gambling. Las Vegas used to be a place people only came to gamble and then leave, with little reason to stay.
Considering that every Las Vegas casino now offers concerts, performances, celebrity chef restaurants, luxury shopping, and more, this may sound crazy. But in 1989, when “The Mirage” opened, it was a contrarian move, and its success quickly forced other casinos to invest in high-quality facilities and entertainment, not just gambling.
In the 1990s, Steve Wynn played a crucial role in transforming the Las Vegas Strip from a gambling-centric destination to a world-class entertainment and leisure destination. The emphasis on hospitality made the Las Vegas experience no longer a zero-sum game and significantly increased the number of visitors to Las Vegas each year for various reasons.
Clearly, the crypto industry can learn a lesson from this. We need to reduce zero-sum table games and increase more positive experiences.
Prediction markets are a good example. Degens love prediction markets because they enjoy betting on extreme-risk choices in binary outcome events, either winning it all or losing everything. Just as they can gamble on meme coins to win 10 times or lose all their funds. At the same time, numerous studies have shown that prediction markets are more accurate than mainstream media and experts by eliminating biases and introducing “skin in the game.”
People using prediction markets don’t necessarily have to place bets on them but can use them as a source of news on geopolitical events, just as people don’t need to visit Las Vegas solely for gambling. Even Trump now frequently releases his Polymarket odds on Truth Social.
There are many other examples. Using decentralized physical infrastructure networks (DePIN) to achieve WiFi mesh networks or vehicle performance data. Using airdrops to incentivize restaurant loyalty or better fitness outcomes. Using NFTs to empower upcoming creators without going through gatekeepers in Hollywood. Crypto degens are early adopters of all these, but the value they bring to society is positive.
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